OMSE and NSSE: what's the difference?

If you are trying to buy in Scotland and cannot afford a home that meets your needs, two Scottish Government schemes can bridge the gap. The Open Market Shared Equity scheme, known as OMSE, helps you buy a home already for sale on the open market. The New Supply Shared Equity scheme, NSSE, helps you buy a new-build home from a council or housing association¹.

Both work the same way in outline. You pay for the biggest share, usually between 60% and 90% of the home's cost under OMSE and usually between 60% and 80% under NSSE, and the Scottish Government holds the remaining share under a shared equity agreement³. You own the property outright with your name on the title deeds, and the government's interest is protected by a standard security over the home⁵.

The difference that matters most is what you can buy. OMSE is for homes already on the market, within price thresholds set for your area. NSSE is for new builds sold by a council or housing association. Both are only available in Scotland.

OMSE buys an existing home, NSSE buys a new build

OMSE helps people buy a home, within certain price thresholds, that is for sale on the open market⁸. You can purchase any size home, subject to affordability and the threshold prices set for your area based on apartment size³. The scheme is aimed at households on low to medium incomes, and the organisation that administers it in your area assesses your application to see whether you qualify⁹.

NSSE is narrower. It helps people buy a new-build home from a council or housing association⁸. Shelter Scotland describes it the same way: with the NSSE scheme, you buy a share of a new-build home from a council or housing association¹⁰. Because the supply comes from social landlords, what is available depends on what is being built in your area.

Both schemes apply the same affordability test in different words. For OMSE you need to be able to show that you cannot afford to buy a home that meets your needs without help from the scheme⁹. For NSSE you need to show that you cannot buy a new-build house that suits your needs without help².

One practical difference sits in the buying process itself. When you buy a newly built home in Scotland, the builder makes an offer to sell to you rather than you making an offer, and that offer comes with a list of conditions¹¹. That is a different rhythm from buying an existing home on the open market, where you note interest and, in many cases, submit an offer through a solicitor.

How much you own: 60% to 90% under OMSE, 60% to 80% under NSSE

Under OMSE, the stake you take will normally be between 60 and 90 per cent of the price of a property, according to the maximum you can afford³. In most circumstances you will have to take a stake of at least 60 per cent of the price of your property³. The Scottish Government's own summary puts it as contributing between 60% and 90% of the purchase price of a home, with Scottish Ministers holding the rest¹³.

Under NSSE, you pay for the biggest share, usually between 60% and 80% of the home's cost, and the Scottish Government holds the remaining share under a shared equity agreement⁴. If you pay for 70% of the home, the Scottish Government will hold 30% of the share⁴.

There is a ceiling on who can use OMSE at all. If you can afford over 90 per cent of the purchase price of a home, your application will not be eligible to participate in the scheme³. The scheme is designed for people who genuinely need help, not for those who could buy outright with a slightly smaller home.

The government's share is calculated on the valuation figure rather than the purchase price under OMSE³. That matters if you negotiate a price below the valuation: the split follows the valuation, not what you agreed to pay.

Who can apply for each scheme

OMSE is open to first-time buyers and to priority access groups¹. Those priority groups are social renters, disabled people, people aged 60 and over, members of the armed forces, veterans who left the armed forces within the past two years, and widows, widowers and other partners of service personnel for up to two years after their partner was killed while serving¹⁵.

NSSE is aimed at households with low to medium incomes, and the local council or social landlord in your area assesses your application to see whether you qualify². Once you have applied, the social landlord writes to tell you whether you qualify and what the next steps are⁷.

Both schemes require you to show that you cannot buy a suitable home without help. That is the core test, and it is assessed against your circumstances rather than a single income figure.

Price limits and how much you must put in

You cannot buy a home for more than a certain maximum threshold price under OMSE⁹. Thresholds are set at the middle (median) house price, worked out using 2015 to 2016 data that matched Scottish Assessors data on the number of rooms with Registers of Scotland data on house prices, for each house size in each housing market area⁵. All thresholds are rounded up to the nearest £5,000, and they are reviewed regularly⁵.

Thresholds vary by area and by the size of the home. In Orkney, for example, the threshold for a two-apartment home is £260,000⁵. Because the figures are set area by area and by apartment size, the only reliable way to know your limit is to check the current published thresholds for where you want to buy.

On savings, the OMSE rules expect you to put in what you can. One worked example in the official guidance has a buyer keeping £5,000 and contributing 90 per cent of the £3,000 balance³. A lender may also expect you to provide a modest deposit in order to obtain a shared equity mortgage¹³.

How to apply for OMSE or NSSE

The two routes start in different places, and the order of steps matters.

For OMSE:

1. Read the official information leaflet first⁶.
2. Contact the administering agent, Link Homes, if you appear to be eligible⁶.
3. If your application is approved, you receive a passport letter confirming you can look for a home under the scheme, stating the maximum price you can pay and the next steps⁶.
4. Find a home within the threshold and complete the purchase.

For NSSE:

1. Apply through the scheme, and the social landlord assesses whether you qualify².
2. The social landlord writes to tell you whether you qualify and what to do next⁷.
3. You buy a new-build home from that council or housing association.

A passport letter is valid for a 12 week period¹⁴. That is the window in which you can look for a home at the price stated on it.

Buying a bigger share later: at least 5% a year

You can increase your stake in your home after you buy, and the rules set a floor on how much at a time. Under NSSE, if you want to increase your share, you have to increase it by at least 5% in a year¹¹. Under OMSE, where there is no golden share, you must increase your stake by a minimum of 5%³. Shelter Scotland summarises the same rule: after you have moved in, you can choose to increase your share by at least 5% each year¹⁰.

You can increase your stake regardless of whether the market value of the property has gone up or down³. That cuts both ways: if values have fallen, buying more of the home costs less, but the share you already hold is worth less too.

Before you increase your stake, you are advised to take independent financial and legal advice, and to contact the administering agent when you wish to do so³. There is a dedicated page on increasing your share in an Open Market Shared Equity home if you want the detail of that process.

Under NSSE, in most cases you will be able to increase your share all the way up to 100%, meaning the Scottish Government no longer holds any share¹¹. You will not be asked about your financial circumstances again after you have bought your home under OMSE³.

Golden share: where you can never own 100%

In certain circumstances the Scottish Government will keep a 10 per cent stake in the property. This is known as a golden share³. It is used in areas where there are only small amounts of affordable housing and few opportunities to build more affordable homes³.

Where a golden share applies, you cannot buy the government out completely. One worked example in the official guidance has a buyer who purchased an initial equity stake of 70% and wants to increase her share; because the property has a golden share, she cannot increase her stake above 90%³. The same cap appears in the scheme's buyer information: you may only increase up to a maximum of 90% as your property has a golden share provision attached¹⁶.

So the practical effect is a permanent minority stake held by the government in that home, and a ceiling on your ownership at 90%. Where there is no golden share, the position is different: one worked example has buyers who started at 65% and later held 100% of the stake, receiving the whole of any increase or depreciation on the sale price of the house³.

Selling your home and what you get back

When you sell, the proceeds are split in proportion to the shares. If you have a 70% share of your home and you decide to sell it, you will get 70% of the selling price and the Scottish Government will get 30%⁹. The same principle applies under NSSE: if you ever choose to sell the home, the Scottish Government will get a share of the money².

That means the government benefits from any rise in the value of its share, and bears a fall. It also means the amount you walk away with depends on the sale price, not on what you originally paid.

On upkeep, the position is straightforward and it sits with you. Under OMSE you are responsible for paying your mortgage, home contents insurance, building insurance, repairs and maintenance, council tax, heating, lighting and water bills, and fittings and furniture⁹. NSSE buyers carry the same list plus factors costs². The general rule for shared ownership homes applies here too: you will need to pay for repairs and maintenance no matter what share you own¹⁸.

The published scheme rules do not set out a separate refund for improvements you make. If you are planning significant work, keep records and take advice before you sell, because the split follows the share percentages rather than what you spent.

Where OMSE and NSSE sit among the other schemes

OMSE and NSSE are Scottish schemes and they are not the only help available, in Scotland or elsewhere in the UK. Knowing which scheme belongs to which nation saves time.

If you are buying in Scotland, the wider picture of shared equity and shared ownership north of the border is set out in shared equity and shared ownership schemes in Scotland. If you are weighing shared equity against shared ownership more generally, shared ownership or shared equity: how they differ sets the two side by side. For the full range across all four nations, see first-time buyer schemes in England, Scotland, Wales and Northern Ireland.

What protects you, and where that stops

The main protection in these schemes is structural. You own the property outright, with your name on the title deeds, and the Scottish Government's interest is secured by a standard security rather than by a landlord's rights over you⁵. There is no rent to pay on the government's share, because this is shared equity, not shared ownership.

The limits are worth stating as plainly as the benefits. You cannot buy above the threshold price for your area⁹. You cannot use OMSE if you can afford over 90 per cent of the purchase price of a home³. Where a golden share applies, you can never own the home outright³. And when you sell, the government takes its share of the proceeds⁹.

If something goes wrong with a mortgage or with the sale, the Financial Ombudsman Service can look at complaints about mortgages, including equity release and similar arrangements, where a firm has not resolved the issue²². For free, impartial help with housing and money questions in Scotland, Shelter Scotland publishes guidance on affordable homeownership routes¹⁰.